Another Tax to Dislike

The Scrapbook

February 24, 2014, Vol. 19, No. 23

The Scrapbook hesitates to kick a football town when it’s in the dumps, but we are baffled by the crazy news coming out of Cleveland. And no, we’re not talking about the Cleveland Browns coaching drama.

The city of Cleveland is engaged in a legal battle with former Indianapolis Colts center Jeff Saturday over a tax dispute. And for once, Cleveland actually pulled off a win.

Saturday sued the city after it charged him the “Jock Tax”—a 2 percent income tax levied by the city on professional athletes (and other wealthy performers) who come to town to (usually) defeat Cleveland’s sports teams.

The city calculates the income figure by dividing a player’s annual salary by the number of games played. The Scrapbook agrees with critics of such taxes, like the Tax Foundation, which says they’re “poorly targeted,” “arbitrarily enforced,” and “unrealistically burdensome to athletes” (many cities and states levy such taxes, not just Cleveland).

Saturday’s complaint concerns a 2008 game the Colts played in Cleveland. The city levied a tax on Saturday despite his not getting any playing time in the game. But he was not even riding the bench that week. He was at home in Indiana, rehabilitating from an injury.

The state tax board ruled in favor of the city. According to the account in the ClevelandPlain Dealer:

The Ohio Board of Tax Appeals accepted arguments by city lawyers that forcing tax officials to determine when a visiting athlete or other out-of-towner missed scheduled work in the city would amount to an “administrative burden.”

Saturday’s lawyer is arguing that Cleveland should change how the tax is structured, by charging on a “duty days” basis—dividing a player’s salary by the total number of days worked rather than games played, thus lowering the tax burden.

The real reason why Cleveland doesn’t want to change is simple: money. The city estimates if they made the change Saturday seeks, they’d lose $1 million a year.

Luckily for Saturday, the Ohio tax board doesn’t have the final say, since it can’t rule on the constitutionality of the tax. Saturday is likely to appeal to the Ohio Supreme Court. The Scrapbook wishes him well in his challenge.